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CASH MANAGEMENT | Roxanne Uy, China
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BofAML the first foreign bank to launch cash management alliance with China UnionPay

BAML's head of treasury product Faisal Ameen gives us some exclusive information on the alliance.

Bank of America Merrill Lynch Global Transaction Services and China UnionPay have officially announced the launch of their exclusive cash management alliance in mainland China.

Bank of America Merrill Lynch is the first foreign bank to launch a dedicated cash management alliance with CUP, the only bankcard association established under the approval of the State Council of the People’s Republic of China and the People’s Bank of China (PBOC).

Asian Banking and Finance interviewed Faisal Ameen, BAML's head of treasury product for Asia Pacific to learn more about the alliance.

ABF: What spurred the launch of this new alliance?

We formed the alliance with China UnionPay to cater to our client demands and preempt future market requirements in China. Additionally, China UnionPay’s strategic ambition to become a more broad-based infrastructure player prompted us to jointly develop a coordinated plan that eventually grew into a strong relationship.

The alliance was founded on a thorough understanding of their strategic priorities and our desire to partner with them to drive treasury innovation within both our organizations.

All projects were and have continued to be joint efforts between Bank of America Merrill Lynch and China UnionPay, which affords greater visibility into the challenges faced by clients in China. By addressing these issues jointly, in a collaborative manner, both organizations have further solidified the relationship.

Also, it is important to remember that our willingness to adopt new infrastructure long before they became industry standards and established practice, made the firm an attractive partner for China UnionPay.

ABF: What's new about it for BAML and your customers?

The China UnionPay alliance substantially bolsters our existing cash management strengths in China and provides a centralized account for Bank of America Merrill Lynch clients for collections to enable account structure optimization.

Through the alliance we can support direct debits from both the largest local nationwide banks for corporate accounts as well as direct debits for consumer flows from over 100 local banks in addition to debits from credit cards issued by over 50 banks. Furthermore, the alliance leverages the strong technology in payment and collections of CUP’s established card settlement network, combined with our unmatched strength in global treasury products.

From where we stand, we see several key propositions that the alliance brings to clients. Firstly, the centralized account structure can support cross-bank direct debit both from individual accounts and corporate accounts and enhance collection structures currently deployed by many corporates. The alliance provides flexible report formats and transaction status reports which will greatly help reconciliation work of our clients.

Additionally, by combining the complementary strengths of our respective organizations, clients are provided with the benefit of accelerated cash management efficiency including shortened days sales outstanding via direct debits.

Outback Steakhouse China recognized advantage of the China UnionPay cash management alliance as key to their mainland expansion plans. Utilizing the China UnionPay alliance we provide the localized cash management solutions required by Outback Steakhouse including daily collections, merchant services, account management and electronic payments.

ABF: What do you hope to achieve with this initiative?

The official launch of the alliance has been on the cards for some time. In 2012 we signed a memorandum of understanding (MOU) and master agreement was signed by Bank of America Merrill Lynch and China UnionPay to provide cash management services in China.

We’re also extremely proud of the fact that we’re the first foreign bank to partner with China UnionPay to establish a comprehensive cash management service to serve corporate clients.

China UnionPay’s network is expanding rapidly in numerous markets globally, the alliance presents Bank of America Merrill Lynch with a first-mover advantage as China UnionPay-based cash management services further develop. It’s a win-win for both parties and primarily, for our clients. 

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